Senator questions if ‘human side’ worsened Kansas unemployment fraud

Kansas state Sen. Caryn Tyson, R-Parker, makes a point during a meeting of a new council on...
Kansas state Sen. Caryn Tyson, R-Parker, makes a point during a meeting of a new council on unemployment issues, Tuesday, July 13, 2021, at the Statehouse in Topeka, Kan. The council is preparing to launch an audit of unemployment fraud, and Tyson wants it to examine whether the state did adequate background checks on several hundred employees it hired to handle a surge in unemployment claims.((AP Photo/John Hanna))
Published: Jul. 13, 2021 at 7:31 PM CDT
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TOPEKA, Kan. (AP/WIBW) - A Republican lawmaker questioned Tuesday whether Democratic Gov. Laura Kelly’s administration made unemployment fraud worse by not conducting adequate background checks on hundreds of people hired to help with a surge of claims during the pandemic.

Sen. Caryn Tyson, of Parker, raised the issue as the state prepared to launch a new investigation of unemployment fraud. Tyson serves on a new council created by the GOP-controlled Legislature to oversee a modernization of the Kansas Department of Labor’s aged computer system and to audit fraud and its effects.

Kansas and other states saw a flood of fraudulent claims when the federal government expanded benefits in response to economic problems tied to COVID-19 and efforts to check its spread. The state Department of Labor estimated that fraudulent claims last year totaled $290 million, but a report by the Legislature’s auditing arm estimated $600 million.

The audit finding was based on KDOL’s estimate that, as of December 2020, about 157,000 - or 24 percent - of the roughly 650,000 claims filed were fraudulent. According to the Legislative Post Audit report, the auditors used this fraud rate to determine the dollar value of the fraud. KDOL said it was inaccurate to assume 24 percent of the total money paid was in error because a majority of cases flagged for fraud were stopped before money was paid.

LPA told 13 NEWS a second audit providing a more in-depth analysis of the fraud is expected to be released in August or September.

The council on Tuesday discussed the scope of its audit so the state can take bids from private firms for the work, with a preliminary report due May 1, 2022. The final report is expected by September next year. The council expects to set the audit’s scope next week, but Tyson said auditors should examine possible “holes or flaws in the human side” of computer security, particularly given the big expansion of the department’s workforce.

“Did they have policies and practices when hiring?” she said. “We brought on so many people for that call center so quickly. What kinds of checks were in place?”

Tyson’s comments and the council’s discussion came hours before Kelly issued an executive order forming a Cybersecurity Task Force to develop better security for state and local governments.

Deputy Labor Secretary Peter Brady said his department would benefit from an examination of possible issues in the unemployment system. But he also said the federal government requires background checks of anyone who has access to sensitive data, general tax information and Social Security data.

The department has said it had 20 people answering calls about unemployment when the pandemic reached Kansas in March 2020. By February 2021, it had 450 people assisting jobless workers.

Several lawmakers on the council worried Tyson’s suggestions could balloon the cost of the audit.

Rep. Stephanie Clayton, D-Overland Park, and another council member, said the Department of Labor expanded staffing quickly because legislators complained people were having trouble getting benefits.

“Hello? We, the legislators, we asked for that,” Clayton said in an interview. “We clamored and said, ‘You need to do this right away.’”

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